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• Translator's Preface
• Section I.: Preliminary Observations.
• Chapter I.: The Question Stated
• Chapter II.: Preliminary Observations On the Rise of Prices Which Has Characterised the Last Few Years.
• Section II.: An Appeal to Some of the Fundamental Notions Upon the Nature and Characteristics of Money.
• Chapter I.: What We Ought to Understand By Value and Price.—twofold Definition of Money.—the Standard Or Fineness of Money.
• Chapter II.: Of the Meaning of the Word Standard.— the Metal-standard Is That From Which Is Derived the Monetary Unit.—the Two Ideas Standard and Monetary Unit Imply Each the Other.
• Chapter III.: Of the Character of Exchanges As Affected By the Invention of Money —how the Rise and Fall of the Precious Metals Are Manifested In the Course of Trade.—phenomena of the Rise and Fall In Commodities.
• Chapter IV.: On the Possibility of Conferring the Quality of Standard Upon Two Metals At Once.
• Chapter V: Of the Meaning of Certain Words Specially Applicable to Money and the Precious Metals.—price, Value, Premium, Dearness, Cheapness
• Section III.: Of the Present Production of Gold and Its Outlet.
• Chapter I.: Of the Increase In the Present Production of Gold As Compared With the Past —the Extended Coinage of Gold Which Has Followed.
• Chapter II.: Diminished Coinage of Silver In France—gold Is Already At a Discount In Comparison With Silver.
• Chapter III.: Extraordinary Exportation of Silver From the Civilised Countries of the Western World Towards India and China —to What Extent It Is Likely to Continue.
• Chapter IV.: France Serves Temporarily As a Parachute to Retard the Fall of Gold.
• Chapter V.: Whether the Extraordinary Production of Gold Ought to Be Considered As an Ephemeral Accident.—the Crushing of the Quartz Veins —mines In Siberia and Elsewhere.
• Section IV.: On the New Outlet That May Be Expected For the Production of the New Gold Mines, and Whether It Will Be In Proportion to the Extent of This Production.
• Chapter I.: Of the Outlet Afforded By Those Countries Which At Present Have Evidently an Insufficient Proportion of Metal In Their Currencies.
• Chapter II.: Of the Increase of Gold Money Which May Arise From the Development of Business, and the Increase of Population.—of Wear and Tear.—of Hoarding.—of Shipwrecks.
• Chapter III.: On the Employment Which Habits of Luxury May Offer to the Gold of the New Mines.
• Chapter IV.: Conclusion of the Preceding Chapters.—the Fall of Gold Very Probable, If Not Inevitable, In Relation to All Other Commodities.
• Section V.
• Chapters I. to V.: On the Part Assigned to Gold In the Monetary Legislation of France.
• Section VI.: Consequences of the Fall In the Value of Gold.
• Chapter I.: A General Distinction Between Those Private Incomes Which Will, and Those Which Will Not Be Affected. of a Certain Collective Loss Which the People of France Will Suffer.
• Chapter II.: Of the Sufferings and Difficulties Which Will Accompany the Transition.
• Chapter III.: On the Gain Which Would Result to Certain Classes of Persons, and to Society, From the Fall In Gold. the Saving to the State From the Payment of the Dividends On the Public Debt.
• Section VII.: Of the Measures to Be Taken to Avert the Evil Effects of the Fall of Gold.
• Chapter I.: Case of a State Like England, Where Gold Is the Standard, and Where There Is No Other Money But Gold.
• Chapter II.: Case of a State Such As France, Where There Is a Silver Standard, But Also a Gold Currency.
• Chapter III.: The Measure Here Recommended Is a Necessary Complement of the Law of Germinal, Year XI.
• Chapter IV.: On Some Inconveniences Inherent In the Combination, Respecting a Gold Currency, Recommended In This Work.
• Chapter V.: Of a Plan Recommended For Maintaining the Parallel Circulation of Silver and Gold.
• Chapter VI.: Of the Resolutions of a Commission Appointed By the Minister of Finance In Mdccclvii.
• Chapter VII.: Of Various Acts Which the Legislation of the Ancient Regime Upon Money Treated As Crimes, and With Regard to Which Some Persons of Our Day Propose to Establish Penalties. —selecting, and Melting; Trade In Coins; Exportation.
• Chapter VIII.: Of a Different Solution Which Has Been Recommended, and Which Would Consist In the Adoption of a Gold Standard.
• Chapter IX.: Appreciation of the System Which Consists In Adjourning Indefinitely the Legislative Solution.

CHAPTER III.

extraordinary exportation of silver from the civilised countries of the western world towards india and china —to what extent it is likely to continue.

It is not only to the fall of gold that we must attribute the divergence which has exhibited itself in the reciprocal value of gold and silver as regards the proportion of 15½ recognised,” under qualifications to be hereafter explained, in the law of the 7 Germinal, year 11. Undoubtedly, the enormous production of gold is in great part the cause of the phenomenon, but to a certain extent the origin may be found elsewhere. Simultaneously with the cause which has produced this divergence by lowering the value of gold, there is another, the activity of which cannot be denied, which raises that of silver. The value of silver rises at present, owing to the sudden demand for this metal for exportation to the remote East. According to the statements published by Mr. James Low, and derived from the books of the Peninsular and Oriental Steam Navigation Company, by whose agency nearly the whole of this precious freight is transported, the vessels of this company carried from England to Asia the sum of £12,118.-985, in silver, in 1856; and of £16,795,232 in 1857. In 1851 it was only £1,716,100. Besides, from the ports of the Mediterranean, there have been sent to the Levant and the remote East (India, China, and the adjacent regions), in 1856, £1,989,616; and in 1857, £3,350,689. This is for the year 1857 a total of £20,145,921, that is to say, of more than double the yield of all the silver mines that supply the markets of the Western World, I mean of Europe and America. This efflux of silver is independent of an exportation of probably one-tenth of the above amount in gold, which has been going on during the last few years. It is true that we ought to deduct from these exportations of silver to the East a certain quantity of imports, because, in these articles, alongside of the general stream there is always a certain counter-current. But we have reason to believe that for the last few years it has been but a limited sum; at any rate the amount is unknown to us.

To form a tolerably correct idea of the disturbance which the former relation of gold and silver has undergone, owing to the extraordinary demand for the second of these metals, it may not be amiss to recall to mind what have been in former times the exportations of silver from Europe and America to the Levant and the remote East.

From ancient times, the commerce of the civilised nations of the West with Asia, which passed by Suez, the Euphrates or the Black Sea, involved the transmission of a certain quantity of silver which the Europeans gave m exchange for the spices and perfumes which they received. According to Pliny,* the quantity of silver which took this direction amounted to 100 millions of sesterces, which, according to the tables prepared by Bureau de la Malle, in his Political Economy of the Romans,† was equal to two millions and a half of francs (£100,000), or rather less than 2,000,000 (£80,000), as estimated by Letronne. In our day the trade between Europe and remote Asia is greatly developed. The Europeans draw from India cotton manufactures and indigo; from China certain manufactures of silk, and also tea, the quantity of which has since acquired great proportions. More recently, other manufactures, such as those of Cashmere, and later still, some further articles, including sheeps' wool, have been derived from India; on its side China has engaged in furnishing Europe with an additional supply of raw silk.

At the commencement of the 19th century, Baron Humboldt estimated that the mass of silver sent annually from Europe and America into Asia, both by sea and the land route whichv passes through Southern Siberia and the North of China, including even that which remained in the Levant, that is to say, the Mussulman ports of the Mediterranean, amounted to 25 millions and a half of dollars,‡ or 612,000 kilogrammes of pure silver, or 137 million francs (£5,480,000), which was nearly three-fourths of the silver then yielded by the whole of the mines of America. But even for the epoch to which it refers, this valuation should be regarded as altogether fortuitous; and, as an average for any particular period, it, must be considered as greatly exaggerated.* More recently, Mr. Jacob has endeavoured to ascertain what the average drain of silver amounted to at the commencement of the century, by examining the valuable records of the East India Company, which then enjoyed the monopoly of the trade of Great Britain with India and China, and was moreover the medium through which the merchants of the United States remitted the precious metals to China, but not to India. This conscientious writer estimates, that by the principal channel, that is to say by the direct ocean navigation, Europe and America did not then export annually of the precious metals to India and China more than about 25 millions of francs (£1,000,000), and that even a very small part of this amount was in gold.† In admitting, without deduction, that the trade of the Levant, and that through Siberia, absorbed the sums indicated by Baron Humboldt, we should arrive at 70 millions of francs (£2,800,000), in lieu of 137 as the total at the commencement of the century.

After the first years of this century, notwithstanding the considerable extension which the peace soon gave to the commerce between the civilised regions of the West and Asia, the exportation of silver never increased to an extent to raise its value, for the merchants of the Western World had discovered other means of effecting their remittances. On this subject, all the authorities are unanimous. The official returns, published by Mr. Jacob, and the other information furnished by him, have led him to the conclusion that, from 1810 to 1830, the average exportation of the precious metals by sea, to Asia, both from Europe and America, did not exceed 50 millions of francs (£2,000,000), and it was less towards the end than at the commencement and middle of the period. It must, however, be remembered that of this amount a small portion consisted of gold. As respects the two other routes indicated by Baron Humboldt, that by land through Russia, and that by the Levant, including, in the latter, the silver which remained there, as well as the portion which reached the remote regions of Asia, Mr, Jacob observes that, at the period when he wrote, in 1831, it was no longer necessary to include in the estimate the amount of silver which flowed through those channels. The qraantity of silver wbicb passed from Russia into Asia, by Kiachta and Tobolsk, had fallen to nothing. The goods, chiefly woollen cloths, that Russia sold to the Chinese, were equal to the teas and other products which China sold to Russia, and it even left a small amount due to the Russian merchants, which the Chinese paid in silver. If, in their trade through Tiflis, the Russians were obliged to liquidate a certain balance with silver, it was an inconsiderable amount, and in any case it was, at least, compensated by the remittances which the Chinese made through Siberia.

As for the commerce of the Levant, or through the Levant, Mr. Jacob states that, at the time when he wrote, the exchanges of merchandise which were made by that route balanced one another.

Baron Humboldt himself, always ready to welcome the development of new facts, acknowledged in the second edition of his Political Essay on New Spain* published four years only before the work of Mr. Jacob, that the exportation of the precious metals to the destination of the Levant, of Hindostan, of China, and the adjacent regions, such as the Indian Archipelago, had considerably diminished, since the publication of the first edition of his work. He added, even, “It is now a generally received opinion, that Great Britain has created a reflux of gold and silver from the peninsula of India into Europe,”

Thus, towards 1830, the remittances in silver, which the civilised Western World had to make to the Asiatics, were far from being extensive; they were certainly much below 50 millions of francs (£2,000,000). More recently, the amount was still further diminished, not only because the merchandise of Europe and America found a greater vent in Asia, but, above all, because the importation of opium into China operated powerfully to change the balance of trade. The commercial delegates who accompanied the French embassy to China, in some publications, prepared with great care,* establish the fact that after 1830 China came to be a much larger exporter than importer of silver; and they give as their estimate for 1842 that China would have that year imported a million of dollars, or five millions and a half of francs (£220,000), and exported 11,160,000 dollars, or 60 millions of francs† (£2,400,000); they add that up to the time at which they wrote, that is to say subsequently to 1845, the commerce in opium alone had caused an exportation of silver from China, to the amount of about 20 millions of dollars, or 108 millions of francs (£4,320,000). Of late, the commerce with India and China has undergone great changes, or to speak more properly, a violent shock. The Chinese government, by prohibiting the importation of opium, has sought in vain to destroy the trade, or even to restrain it. The civil war which is convulsing a large part of the Chinese empire, by spreading disquiet and alarm, has caused a demand for the precious metals, because of all wealth they are the most easily concealed. In India, a formidable insurrection has threatened the British dominion, from which arose a disturbance in the exchanges between Europe and those vast possessions; and, besides, to meet the expenses, England has been obliged to despatch large quantities of silver to the seat of war. All these causes have operated in a manner to attract towards Asia a much larger proportion of silver than previously, and thus explain, to a certain extent, the unexampled increase which has during the last few years taken place in the exportation of silver from Europe and America into Asia.

The commercial relations of Europe and Asia have been, moreover, considerably modified by other circumstances. On the one hand, the bad harvests have compelled the people of Europe to resort to the East for rice; whilst on the other, the crop of silk having failed in France, Italy, and elsewhere, the silk manufacturers, so numerous in France, Switzerland, England, and Germany, have been obliged to resort for a much larger portion than heretofore of their raw material to China, where it is cultivated in great quantities; and we all know that silk is a very costly article.

It is under these influences that the exportation of silver from the nations of the West into Asia has experienced, since 1852 and 1853, the enormous augmentation mentioned above.

It must be borne in mind that the magnitude of the amount of silver absorbed annually by Asia, is of recent date; it is an unforeseen phenomenon which has abruptly presented itself, and one could not conscientiously take it for a fact definitely and unchangeably established; it would be exposing oneself too much to the risk of deception, to assume that the present will be the rule of the future.

If asked formally to express an opinion as to what is likely to be the future in this respect, I should decidedly withhold it even with reference to an early period; it seems to me that there are insurmountable difficulties in the way of making a rational prediction on the subject, so numerous, and, moreover, so fleeting and intangible, are the elements which it would be necessary to take into account.

Doubtless India will soon return again entirely under British rule; but will order be so speedily re-established, and will the exchanges with that country immediately resume their accustomed course? On this point it would be premature to predict anything. and then will it not be necessary to maintain there, at a great expense, a large European army, which may, and indeed must, necessitate heavy remittances of specie? Is it not also possible that India, restored to peace, and intersected with railroads, which were in active progress before the insurrection, may soon become a great storehouse, whence Europe may derive her cotton, the supply of which has been, up to this time, a monopoly in the hands of the United States? That would be a powerful cause for the continuance of the flow of silver from Europe to the East Indies. On the contrary, is there not ground for presuming that the numerous population of India may become so changed in their social habits, under the vigorous administration of Englishmen, as to accustom themselves to the consumption of the manufactures of Europe and the United States, which would dispense with the necessity of their sending the precious metals in payment for the raw materials which are furnished by India, and thus tend to restore the exchanges to nearly the state in which they were about the year 1845?

As respects China, there is room for similar observations, but in a sense the opposite of each other. China offers to Europe raw materials of great value, and, especially, as has been seen, silks in immense quantities, as well as that article which has taken so important a place in the alimentary habits of the two great Anglo-Saxon communities. The exportation of tea from China to England, and its numerous dependencies, and also to the United States, has only acquired its interesting proportions within the period of a century;* —but in our day it is very considerable, and is constantly increasing In return, the products of Western industry are trying to adapt themselves to the habits of the Chinese consumer: aided by a recourse to the various productions of India, will they be sufficient to balance the amount of the productions furnished by China to the Western world? When, one way or another, the civil war which now ravages the Celestial Empire shall have been brought to an end, and when the campaign undertaken by England and France to compel the Chinese government to renounce its system of isolation shall have succeeded, is it not credible that the 350 or 400 millions of industrious men, attached to the enjoyments of life, comprised in the Chinese provinces, will be inclined to adapt to their usages a multitude of commodities with which the trade of Europe and America can supply them? In assuming it to be probable that such will be the case, how long will it take to put this new state of things, this vast system of exchanges between China and the people of the “Western World, on such a footing that the productions bartered between the two parties shall balance, or nearly so, one another? On this subject we can only hazard conjectures. It is clear, however, that the actual state of the exchanges which is balanced by the annual remittance to Asia of from 400 to 500 millions of francs (from 16 to 20 millions sterling), by the Europeans and Americans, can only be regarded as accidental, and that it has not yet received that sanction from experience, without which the facts ought not to be made the grounds of conclusions by enlightened men, or of the calculations of governments.

[*]Natural History, Book XII, Chap. XVIII.

[†]At the end of the 1st volume.

[‡]As follows.—

(Humboldt.—Essay on New Spain, Vol. III., p. 413. 2nd edition.

[*]We are warranted in concluding, from the language of M. Humboldt himself, in the second edition of the Essay on New Spain, published in 1827, that, with his proverbial truthfulness, he has since discovered that the above estimate was excessive, even for the first years of this century

[†]An Historical Inquiry into the Production and Consumption of the Precious Metals, Vol. II., Chapter XXIV., p. 196.

[*]New Spain, edition of 1827, Vol. III., p. 473.

[*]See these documents in the Annales du Commerce Exterieur, a collection issuing from the department of commerce: they are to be found under the head of China and Indo-China, Commercial Facts, Nos. 13 to 20, particularly No. 13. Consult especially page 19.

[†]Page 18 of No. 13, as above.

[*]The quantity of tea sold by the East India Company did not exceed a million of kilogrammes (2,200,000 lbs.) until about 1750. From 1748 to 1759, the average annual sales of the Company were 2,558,081 lbs. It is true that the Dutch and other nations also imported some tea from China. Of the above 2,558,081 lbs., a certain portion was exported, which so far reduced the amount retained for consumption at home. At present the quantity consumed in the United Kingdom amounts to 63,295,643 lbs. The 23rd volume of the large statistical work of Mr. John Mac.Gregor contains, on the history of the trade in tea, a chapter full of interesting details, to which the reader is referred (page 292). The Annals of Foreign Trade (No. 983 of the 3rd series of the Miscellaneous Intelligence, China, and Indo-China, Commercial Facts, No. 24,) estimates at 169,443,786 lbs. the total exportation of tea from China in 1855.